DOE Grants Cove Point LNG Final Approval, Earthjustice Sues

Big-news.jpgWe have two big pieces of news to share with you today about the Cove Point, Maryland LNG export facility being built by Dominion. The first is that yesterday, after a years-long process, the Obama Dept. of Energy finally gave Dominion their final stamp of approval to build the facility. Last month we pointed out this last piece of the puzzle still had not fallen into place (see Cove Point LNG Plant STILL Waiting for Final DOE Approval?!). It now has. There is nothing else in the way to stop the project. Except, possibly, a lawsuit–which is the second big piece of news. On Wednesday we told you that the Federal Energy Regulatory Commission had finally, this week, responded to a request for a re-hearing on the facility demanded by anti-drilling groups. FERC declined (see FERC Says “No” to Anti’s Request for Cove Point LNG Re-hearing). As we explained on Wednesday, the groups needed an official response from FERC on a re-hearing before they could launch yet another frivolous lawsuit. As we predicted on Wednesday, they’ve now filed a frivolous lawsuit in another last-gasp attempt to stop the Cove Point export facility from becoming reality…
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NY DEC Signals Support for Seneca Lake Propane Storage Project

A little good news coming from New York State for a change. The state’s Dept. of Environmental Conservation (DEC) has “quietly” given its support to the Crestwood Midstream plan to use a depleted salt cavern along the shores of Seneca Lake to be used as a propane storage facility. We’ve written about this before–about the very safe plan to use it in this manner, and about protesters like Sandra Steingraber who seem to enjoy trips to the county jail for blocking the facility, repeatedly (see Steingraber, 2 Others Sent to Jail for Refusing to Pay Fine). In February an “issues conference” was held before an administrative law judge where testimony was given by both sides–Crestwood Midstream and anti-drillers. The anti-drilling side is being funded by the odious Earthjustice and National Resources Defense Council (NRDC). The DEC has sent a brief (full copy below) saying, in essence, (a) those against the project haven’t proven this facility would bring about environmental Armageddon, as they say it would, (b) some of the loonies opposing it don’t even have standing to oppose it, and (c) no more hearings are required. The only continuing reservation we have, and the reason we’re not celebrating just yet, is that the person who will make the ultimate decision is the head of the DEC, the anti-drilling Joe Martens, a man deeply in the pocket of Big Green…
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Wheeling Non-Profits Sue Chesapeake for Taking O&G with No Lease

A group of non-profit organizations in the Wheeling, WV area is suing Chesapeake Energy claiming the company illegally stole oil and natural gas from underneath their property without a valid lease. The Parks System Trust Fund of Wheeling, Ohio Valley Medical Center, Elmhurst House of Friendship, Vance Memorial Presbyterian Church, the Children’s Home of Wheeling and the YWCA are all joint owners of 224 acres bequeathed to them in 1957. The groups say Chesapeake illegally pooled their acreage with others in a local drilling unit and proceeded to extract oil and gas without paying them…
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Rice Energy Doubles Production 1Q15; Utica Flows; Ekes Out a Profit

Rice Energy, a driller focused on the Marcellus and Utica Shale region, released their first quarter 2015 update yesterday. Counter to most others, Rice was actually able to eke out a gain of $152,000 for 1Q15 (most others, in fact we think all others, experienced a loss in 1Q15). Of course that’s down radically from 1Q14 when the company made $129.5 million! But still, they ended up on the positive side of the balance sheet. The big news was that Rice more than doubled their production in 1Q15 from a year ago–to an average 440 million cubic feet equivalent per day (Mmcfe/d). Unlike last year, this year 15% of Rice’s production came from the Utica Shale (last year it was 0%). Rice’s midstream division continues to experience strong growth as well–by volumes shipped and by revenue. Below we have Rice’s update yesterday, links to several stories analyzing Rice’s results, and a copy of the newest PowerPoint slide deck, used by Rice management on their earnings call with analysts…
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Gastar 1Q15: NE Production Up 5%, No New Marcellus Wells in 2015

Gastar Exploration has a small but meaningful drilling program in both the Marcellus and Utica Shale with close to 60,000 acres leased. As we reported in February, Gastar is scaling back operations in the northeast for the balance of 2015 (see Gastar Finishing 5 Wells, Then Idling Rigs in Marcellus/Utica). The company released their first quarter update yesterday and reports northeast production is up a hair, from 6,400 barrels of equivalent per day (Boe/d) in 1Q14 to 6,700 Boe/d in 1Q15–a 5% increase. Here’s the portion of yesterday’s update dealing with the Marcellus/Utica…
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PDC Energy Turns a Profit in 1Q15, Utica Production Up

In 2014 PDC Energy sold off its 141,000 of Marcellus Shale leases to Mountaineer Keystone for $500 million (see Major New Player in the Marcellus Emerges: Mountaineer Keystone). However, PDC kept its Utica Shale acreage, although they aren’t drilling any new wells in the Utica for the time being (see PDC Energy Pushes Pause Button on OH Utica Drilling for 2015). PDC continues, for now, to focus on the Wattenberg field in northern Colorado. They must be doing something right because the company seems to be one of the few shale drillers to turn a profit in 1Q15…
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Rig Counts Continue Big Decline in April, NE May Have Bottomed

The rotary rig count tabulated by Baker Hughes continued to slide in April. The latest monthly rig count report shows another 134 land-based rigs in the U.S. were laid down between March and April. As of April there were 943 active rigs drilling on land in the U.S., down from 1,067 rigs in March. Ouch. What about the Marcellus and Utica region? MDN has done some analysis and we have reason to hope that we may have hit the bottom in the northeast as far as declining rig counts…
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Anti-Drillers Cheer PA Gov Wolf’s New Appointment to Head PUC

The Pennsylvania Public Utility Commission (PUC) “balances the needs of consumers and utilities; ensures safe and reliable utility service at reasonable rates; protects the public interest; educates consumers to make independent and informed utility choices; furthers economic development; and fosters new technologies and competitive markets in an environmentally sound manner.” The PUC also greatly affects the state’s shale drilling industry (see Major Milestone: PA PUC Rules Mariner East IS a Public Utility and PA PUC Says Impact Fee Payment Calculations Still “Off”). So it was with keen interest that we noticed newly elected Gov. Tom Wolf has appointed a new head of the PUC, Gladys Brown, a true believer in man-made global warming and someone who advocates for so-called energy efficiency (i.e. lock down your thermostat) and reducing carbon emissions (i.e. tax industry into oblivion). We see a coming disaster with Brown at the helm of the PUC. Still glad you elected Wolf? No, we didn’t think so…
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Range Resources Floats Another $750M in IOUs to Pay Down Old Debt

Marcellus powerhouse driller Range Resources first announced yesterday that they are floating $500 million of new IOUs (called senior notes), then a short time later changed it and say no, they’re now offering $750 million of new IOUs instead. Cash from the senior note offering will go to pay off older IOUs and debts. The new round of IOUs will come due in 2025. Here’s the Range two-step from yesterday…
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